Taiwan and China swing between conflict and conciliation

Over the last few months, relations between Taiwan and China have hit some bumps. Since President Ma Ying-jeou assumed office in May 2008, increased tourism and cross-strait talks has been the order of the day between the two sides. However, recent events have indicated a slight cooling in this love affair.

China retaliates against Dalai Lama’s Taiwan visit

After Typhoon Morakot devastated southern Taiwan, seven magistrate and city mayors from the Democratic Progressive Party in the Kaohsiung area invited the Dalai Lama to visit. Under strong protest from Beijing, President Ma immediately approved the visit on humanitarian grounds. The Tibetan spiritual leader arrived in Taiwan on August 30th and stayed for six days comforting the victims of the disaster.

In response, the Chinese authority retaliated by canceling the bookings of over 3,000 hotel rooms in Kaohsiung made by Chinese tourist groups. According to the Taipei-based China Times, this caused a loss of NT$6 million (US$185,000), inflicting further damage to the Kaohsiung tourism industry after Typhoon Morakot. Additional reports from the Apple Daily said that added cancellations by Chinese businesses, trade missions, exchanges and study groups scheduled for September upped the loss to billions of Taiwan dollars.

Relations strained by Kadeer’s documentary

China’s displeasure with Taiwan was compounded with the recent screening of 10 Conditions of Love, the controversial documentary about exiled Uighur leader Rebiya Kadeer. Considered a terrorist by Beijing, her documentary was originally scheduled to show at the Kaohsiung Film Festival this month. Instead, the film was shown earlier on September 22nd and 23rd in order to minimize the controversy. This film has caused rifts not just in Taiwan but elsewhere as well. When the Melbourne International Film Festival chose to premiere 10 Conditions in August, six Chinese-language films withdrew from the festival in protest.

Regardless of the documentary’s screening dates, Kadeer was not granted a visa to travel to Taiwan. The government denied her a visa on the grounds of national security since the World Uighur Congress led by Kadeer has maintained contact with two terrorist organizations.

While improving relations with China, Ma has been accused of being too cozy with Beijing. Allowing the Dalai Lama’s visit to Taiwan was the first action by the Ma Administration which has displeased Beijing. However, it is also a starting point for the two sides to adjust to its new relationship. Li Yong-der, deputy mayor of Kaohsiung City, said it is a rare opportunity for the two sides to learn how to react to something that does not please either side.

Dependent on China’s “uncertain goodwill”

Whereas most Taiwanese see the Kadeer situation as a step towards re-asserting itself, most agree that stable relations with China is necessary for Taiwan’s economic health, especially given that China is Taiwan’s largest trading partner as of four years ago. Currently, Hong Kong accounts for 41 percent of Taiwan’s total exports. In the last decade, Taiwan enjoyed a favorable trade balance with China and the trade surplus has increased 126 percent to US$40 billion to US$50 billion a year. This relationship saved Taiwan economically when the global financial crisis hit. Without it, Taiwan would have suffered a trade deficit of US$27 billion if it had not had a trade surplus of US$42.5 billion with China.

Furthermore, the number of Chinese tourists visiting Taiwan in the first half of 2009 alone was three times the number of Chinese tourists visiting the island in all of 2008. At this pace, China will soon overtake Japan as the leading source of tourists visiting Taiwan. Also, Taiwan’s investment is very much tied with China. According to Tung Cheng-yuan, an associate professor at National Chengchi University, commenting in Commonwealth magazine, three-quarters of Taiwan’s foreign investments go to China, including Taiwanese business investment in British Caribbean colonies which is transferred to China indirectly. This leaves Taiwan and its estimated investments of US$340 billion (accumulated from 2002-2008) dependent on the “uncertain goodwill” of China, said Tung.

Shift from confrontation to détente too hurried

According to Lai Shin-yuan, minister of Taiwan’s Mainland Affairs Council, President Ma has done more to improve cross-strait relations in the past year, than was done in the whole of the last 60 years. Professor Chen Fang-ming of the National Chengchi University believes relations between the two sides have swung too fast - from confrontation to détente. There was no transitional period to adjust. Most Taiwanese have found it hard to adapt to this new situation. A survey by Commonwealth magazine showed that 48 percent of the respondents believe that opening up to China is beneficial to the island while 43 percent believe this would be harmful for Taiwan.

In a recent interview with Japan’s largest newspaper Yomiuri Shimbun, President Ma said, “We know there are some people worrying about the pace of improving ties across the Taiwan Strait being too fast. Actually, being fast or slow is a relative term, not an absolute one. In the past eight years of Democratic Progressive Party government, cross-strait relations were in a stagnant situation, losing Taiwan many opportunities it was entitled to enjoy. This was not favorable for the Taiwanese people,” and “I think the current pace of improving relations across the Taiwan Strait is just right in maintaining our dignity on the one hand while promoting bilateral relations across the strait on the other.”

If Taiwan’s people are uncomfortable with the pace of improving relations across the Taiwan Strait, countries elsewhere have no such reservations. At the 2009 U.S.-Taiwan Defense Industry Conference in Virginia, Assistant Secretary of Defense for Asian and Pacific Security Affairs Wallace Gregson said a strong Taiwan will be less susceptible to coercion or intimidation from China, and better able to engage China with confidence. He emphasized that Ma’s initiatives to reduce tensions across the Taiwan Strait and improve US-Taiwan dialogues are beneficial to the security and stabilization of Northeastern Asia.